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Virgin Media O2 and Daisy Group have announced a strategic merger of their B2B operations, aiming to challenge BT’s longstanding dominance in the UK enterprise communications market.
The new company, valued at roughly £3 billion, will combine Virgin Media O2’s infrastructure capabilities with Daisy Group’s specialist IT services, creating a communications and IT provider with an initial annual revenue base of approximately £1.4 billion.
However, the financial structure of the merger is complex. An intercompany loan of £425 million will come from Virgin Media O2, while £835 million in debt from Daisy Group is to be cleared.
While the deal is ambitious, industry observers remain cautiously optimistic about the challenges ahead.
Daisy Group will hold a 30% stake, while Virgin Media O2 will retain 70% ownership of the new entity.
Still, questions remain over how effectively two distinct business models – Virgin’s scale-driven connectivity and Daisy’s consultative IT services – can unify operations, systems, and customer experience without friction.
Leadership will be jointly steered by Matthew Riley, founder of Daisy Group, as Chairman, and Jo Bertram from Virgin Media O2 Business as CEO.
The merged company intends to serve a broad spectrum of clients, from SMEs to large corporations and public sector organizations, offering end-to-end managed services including 5G private networks, IoT solutions, AI-powered analytics, and cloud communications.
Despite access to Virgin’s next-generation fiber and mobile networks, and Daisy’s “award-winning customer service,” it remains unclear whether the combined company can truly deliver a best-in-class, digital-first experience at scale.
Lutz Schüler, CEO of Virgin Media O2, described the merger as “a new British business connectivity powerhouse,” promising “a one-stop shop for all communications and IT needs.”
While the message is bold, it remains to be seen whether the company can match BT’s entrenched presence and navigate the logistical challenges of merging product portfolios and support operations.
From Daisy’s side, Matthew Riley called the merger “a transformational transaction” and “the most comprehensive offering for businesses of all sizes,” positioning it as essential for delivering scalable, integrated IT and communications tools in a fast-evolving digital landscape.
Both companies are talking tough, which is commendable, but the phrase “comprehensive offering” is often overused in B2B marketing and real-world success will ultimately depend on how well integration efforts are executed.
Set to close in early H2 2025, pending regulatory approvals, the new entity is projected to unlock £600 million in operational synergies over time.
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